| The screen of woes looks brighter
Mumbai, Jan. 1: Coming out bruised from a traumatic year that offered no light at the end of a never-ending tunnel, movers and shakers of the country’s stock market say they have finally spotted an elixir.
Dalal Street wound up the first day of 2003 with a 13-point gain, firing hopes that the year ahead will be better. Underpinning that optimism are public sector companies, which have perked up amid signs that the floundering disinvestment drive will be put back on course.
Hindustan Petroleum (HPCL) fuelled the rise today, propelled 6.4 per cent by operators expecting a string of market-friendly measures in the run-up to the budget. “There is a lot going for the markets. Unlike the Indian cricket team, bourses are on a stronger wicket,” said Ramesh Damani, a prominent BSE broker.
Once the market understands implications of the Kelkar committee report (on sops for equity investors), the markets will acknowledge that these are indeed historic, unbelievable concessions. “The low interest rates and incentives for stock markets will generate fresh interest in equity buying,” he added.
There are some who look at the bigger picture — the economy — to argue that the worst was behind them. On their list of positives that could spur the markets are macro-economic factors like a strong currency and the continued faith of foreign investors in India.
“With the dollar depreciating against the rupee, foreign investors would like to keep their investments here,” said Arun Kejriwal of Kejriwal Research and Investment Services.
He was, however, quick to point to the flip-side of a rupee boost. “We are no longer the cheapest market in the world. The rupee’s appreciation could throw a spanner in the works of firms relying on exports for growth. The behaviour of US markets, trends in bullion trading and the cost of crude oil are also worrisome.”
The concerns are accentuated by the fact that the Dow closes in negative territory for the third straight day. Analysts believe fears of an assault on Iraq and a prolonged West Asia war will upset many economic calculations.
At home, analysts are betting that the banks, power companies and the steel industry will ignite a possible 2003 rally. Today though, there was not much in the market to suggest that slump-weary investors were returning. The sensex closed 0.38 per cent higher at 3,390.12 points, but turnover on BSE sank to a measly 54.6 million shares — the lowest seen over the past week.
Oil companies ended strong, helped by market whispers that the attorney general will come forth with an opinion that helps the government end the sell-off spat. According to Kejriwal, divestment will be the recurring theme for the stock market this year, despite setbacks suffered on several occasions in the past.
Bharat Petroleum (BPCL) gained 3.8 per cent at Rs 224.90, Nalco firmed up 3 per cent at Rs 95.35 and Engineers India Limited vaulted around 4.4 per cent at Rs 295.35.